Abbe Nigo reads during summer school program for English Language Learners at Hawthorne Elementary School in Sioux Falls, S.D. Wednesday, July 18, 2012. / Emily Spartz / Argus Leader

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School taxes over time

Property tax mil levies for the Sioux Falls School District. The mil levy represents the total school tax for every $1,000 of assessed valuation for each type of property.

2000

2005

2012

2013

2014*

Agricultural

$8.82

$7.92

$6.58

$6.49

$6.42

Owner-occupied

$11.68

$10.08

$8.38

$8.44

$8.90

Commercial

$20.27

$16.60

$13.54

$13.66

$14.43

* proposed property tax mil levy for 2014

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Plans to raise teacher pay, help struggling readers and implement an ambitious technology program in the Sioux Falls School District next year would come with a 5.5 percent property tax increase for city homeowners — the first significant school tax hike in years.

The owner of a home valued at $150,000 would pay $69 more to the school district under a proposed budget released Wednesday and headed for the school board Monday night for tentative adoption.

The budget recommended by administrators and two of the five board members contained no major surprises. The board previously discussed sagging scores on reading tests, which the budget addresses by hiring 19.4 full-time equivalent reading specialists for elementary schools and two for middle schools.

“The reading program was one I think everyone was committed to,” Doug Morrison, school board president and a budget committee member, said during a board work session.

There’s also money for the district’s 1:1 technology initiative, which was announced last month. Next year, every student in grades 3-12 will have a Google Chromebook to use at school, at a cost of $4.4 million; the district intends to buy iPads for grades K-2 the following year.

Teachers can expect better compensation next year in addition to the new technology.

The school board and employee groups are negotiating new five-year employment agreements, which should be in place later this month. School administrators did not provide specifics but said they intend to raise salaries to “help employees recover from devastating setbacks in FY11 and 12,” caused by reductions in state aid to education.

They were specific, however, about pay for substitute teachers, who complained last summer that they were making less than those in neighboring school districts. The subs, who are not part of any collective bargaining unit, can expect 11 percent more in their checks next year if the budget is approved.

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“This budget shows some expansion,” board member Kent Alberty said, noting that the economy is improving. “Things are good, so we can make the investment in the students and teachers.”

Although the budget would raise taxes, growth in property valuation has kept those rates down over the years. The total owner-occupied mil levy — what homeowners pay for every $1,000 of assessed valuation — will be $8.90 next year, up 46 cents. But the mil levy was more than $10 a decade ago.

In addition, much of the tax increase is out of the school board’s control. The Legislature raised the state’s mil levy for special education by 15 cents and general education by 25 cents because property values have not kept up with need.

The remaining 6-cent increase is a local decision. The district wants to increase the capital outlay mil levy from 26 cents to 32 cents, largely to pay for school construction bonds issued in 1997, business manager Todd Vik said.

Overall, general fund expenditures are proposed to go up by $11.3 million, to $142.8 million. Revenues should rise by only $7.5 million, to $136.2 million, because of expected enrollment growth of about 675 students, plus state funding increases.

That $6.6 million in planned deficit spending marks an aggressive attempt at cutting into the district’s swollen reserve fund. Financial advisers said years ago that the district was socking away too much tax money, but the district generally spends less than it plans to, so they’ve made little progress in reducing the rainy day fund, which is projected to hold $22 million at the end of the year.

Morrison said per-student revenue from the state is getting more predictable and federal cuts from the sequester weren’t so bad, so it’s time to spend those reserves.

“I think, overall, it’s the right thing to do, and I see enough stability where I feel comfortable spending into the fund balance,” he said.

The budget plan also seeks an increase to the upcoming bond issue. The board had planned to borrow $25 million next year but instead will seek a $30 million bond issue to pay for new schools, security upgrades and more. The $5 million increase is largely to pay for the Chromebook and iPad initiative. Such bonds typically are paid off over 20 years.

The budget calls for no significant cuts to programs, but the district thinks it can save close to $800,000 by continuing to cut down on energy usage.

Among some of the smaller changes is another 10-cent increase in the cost of school meals. The food service program pays for itself with help from federal subsidies, and officials say the government’s mandates for healthier meals means higher costs.